Gregoire outlines $2 billion in health care, higher ed cuts

By VANESSA HO, SEATTLEPI.COM STAFF

Updated 3:03 pm, Thursday, October 27, 2011

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An unhappy Gov. Chris Gregoire addresses the media about her budget cutting ideas to deal with a $2 billion deficit in the state budget on Thursday, Oct. 27, 2011 in Olympia, Wash. Gregoire says about her options are limited. The state has already cut $10 billion from state government over the last three years. (AP Photo/The News Tribune, Lui Kit Wong)

An unhappy Gov. Chris Gregoire addresses the media about her budget cutting ideas to deal with a $2 billion deficit in the state budget on Thursday, Oct. 27, 2011 in Olympia, Wash. Gregoire says about her

Gov. Chris Gregoire unveiled her proposed budget cuts Thursday to fill a massive $2 billion shortfall, with a grim set of choices that would eliminate subsidized health care for 35,000 poor people, end medical services for 21,000 people, cut higher-ed funding by 15 percent, and reduce community supervision of all offenders.

"The list of options I've presented hurts," the governor said. "This is not what I signed up for when I started as a caseworker 40 years ago. But it's what the world economy handed our state and our country."

The budget roadmap comes a month before the Legislature will convene in late November for a special session to to deal with the deficit. It follows $4.6 billion in cuts from the last legislative session, and comes after $10 billion in cuts in the last three years.

Gregoire did not address revenue options. She said she had been solely focused on creating budget options.

"I have not thought about revenue," she said. "I can't communicate to you enough on how difficult this has been."

In a speech both personal and critical, the governor blamed Wall Street and Congress for the state's economic plight and painted a dire picture of potential impacts.

It included poor people without health care, mentally ill people without services, domestic violence victims with fewer shelters, hospitals with less money for charity care, and kids with fewer teachers. It included more youths who can't afford college and more criminals unsupervised on the street.

"While my heart is there, my pocketbook is empty," Gregoire said.

"The need is out there. There's no question about it. I simply do not have the resources to meet the need today. I have nowhere else to turn right now."

With a forecast of plunging tax revenues - $1.4 billion lower than predicted – the governor had few choices. Of the state's $23.8 billion in the general fund, only $8.7 million is eligible for cuts, due to state and federal laws. That means the state's shortfall represents a 23 percent budget cut.

Gregoire said the days of a "Pac-Man budget" involving bite after bite is gone. Her proposal, which outlines nearly $2 billion in preferred cuts from an identified $4 billion in reductions, includes the elimination of entire programs.

They include Basic Health, in which 35,000 low-income people would lose coverage on Jan. 1, for a $48 million savings.

Also gone would be entire medical services for 21,000 people who are temporarily disabled or in an alcohol or drug treatment program. Another program proposed for elimination is state food assistance, affecting 13,000 people.

The proposal takes a large $78 million bite out of public safety, in which all "low to moderate risk" offenders - including sex offenders – would leave prison 150 days early. Once on the street, offenders would have a reduced supervision of just 12 months, except for sex offenders. They would be supervised for two years.

The governor's cuts would also close one minimum-security camp and lower the security level at the Monroe state prison from medium to minimum.

Education is also hard hit, with a proposed 15 percent reduction – a $166 million cut – to the state's public colleges, universities, community colleges and technical schools. Financial aid for low-income students would be reduced by 25 percent.

Elementary schools would see a 50 percent cut in levy equalization funds, and class sizes for most elementary grades would grow by two students.

"This is what our choices look like even after we let go of thousands of state workers and cut money to our public schools, our colleges and universities, our prisons, and shredded our safety net for the old, sick, and poor," Gregoire said.

"This is what our options look like even after we've taken the biggest steps in decades to make government leaner and more efficient. I don't want anyone to think that I like these options."

She noted that Washington has one million more residents than a decade ago, but 2,000 fewer public workers. Much of the remaining work force, which Gregoire described as "demoralized," learned this week that her office wants to re-negotiate how much workers pay in health care premiums.

The governor blamed the budget woes on the drop in consumer confidence, "brought on by actions on Wall Street, inaction by Congress and the European debt crisis."

"I wouldn't be standing here with a mess on my hands on if Congress had done their job in August," she said.

The budget options triggered immediate concern and calls for new revenue, an issue Gregoire repeatedly declined to discuss Thursday.

"We've already slashed more than $2 billion in funding from Washington's public schools in the last few years. It's clear we also need new revenue. Washington's students need a quality education, more than big businesses need tax breaks."

Cassie Sauer, spokewoman for the Washington State Hospital Association, said the proposed cuts to rural hospitals and vulnerable residents are "staggering."

"People with serious disabilities and mental illnesses will lose their health coverage," she said. "Their health will worsen, and they could suffer disability or even death."

Gregoire will present her final proposed budget next month. You can watch her presentation here.